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ECONOMIC INDICATORS

ECONOMIC INDICATORS. Understanding Economic Indicators. Background Economic Theme: Recognize the stage of the business cycle. Cycle of the Indicator.

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ECONOMIC INDICATORS

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  1. ECONOMIC INDICATORS

  2. Understanding Economic Indicators • Background Economic Theme: Recognize the stage of the business cycle.

  3. Cycle of the Indicator • Leading indicator: used to predict changes in the economy. Its trajectory changes before the economy follows a particular pattern. i.e. Conference Board LI • Coincident indicator: varies simultaneously with the business cycle. It indicates current economic conditions. i.e. industrial production • Lagged indicator: follows the business cycle with lags. It illustrates where the economy has been. i.e. corporate profits

  4. Nominal vs Real

  5. Adjusted vs Non-adjusted

  6. Growth Rates

  7. Indicators by Sector of Economic Activity

  8. GDP • Published by: Bureau of Economic Analysis (BEA) • Frequency: Quarterly • Period Covered: Prior quarter • Market significance: High • Best measure of economic activity • Economic Indicators.gov

  9. Consumer Spending

  10. Personal Income and Spending • Published by: BEA • Frequency: monthly • Period Covered: prior month • Market significance: Moderate • Accounts for about 2/3 of real GDP but undergoes frequent revisions • Economic Indicators.gov

  11. Car and Truck Sales • Published by: Motor Vehicle Manufacturers and Importers • Frequency: Monthly • Period Covered: Prior month • Market significance: moderate • Leading indicator of economic activity. Undergoes revisions.

  12. Retail Sales • Published by: Bureau of the Census • Frequency: Monthly • Period Covered: Prior month • Market significance: High • First indicator of consumer activity • Latest Advance Monthly Sales for Retail and Food Services

  13. Home Sales • Published by: Bureau of the Census • Frequency: monthly • Period Covered: prior month • Market significance: moderate • Leading indicator of economic activity. High volatility. • http://www.census.gov/cgi-bin/briefroom/BriefRm

  14. Consumer Credit • Published by: Federal Reserve Board • Frequency: monthly • Period Covered: two prior months • Market significance: moderate • Indicator of the financial health of consumers. But comes in late.

  15. Consumer Confidence Measures • Published by: University of Michigan, the Conference Board, and ABC News. • Frequency: monthly • Period Covered: varies • Market significance: moderate • Leading indicator of consumer spending. http://www.conference-board.org/economics/ConsumerConfidence.cfm

  16. Industrial Activity

  17. ISM Manufacturing Survey • Published by: Institute for Supply Management (ISM) • Frequency: Monthly • Period Covered: Prior month • Market significance: Very high • First report on industrial activity. • http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942

  18. Industrial Production and Capacity Utilization • Published by: Board of Governors of the Federal Reserve System • Frequency: monthly • Period Covered: prior month • Market significance: moderate • Good forecast of business cycle.

  19. Housing Starts/Building Permits • Published by: Bureau of the Census • Frequency: monthly • Period Covered: prior month • Market significance: moderate • Good predictor of business cycle. Subject to revisions.

  20. Durable Goods Orders • Published by: Bureau of the Census • Frequency: monthly • Period Covered: prior month • Market significance: high • Key indicator on future manufacturing.

  21. Construction Expenditures • Published by: Bureau of the Census • Frequency: monthly • Period Covered: prior month • Market significance: low • Good coverage. But late and with major revisions • http://www.census.gov/const/C30/release.pdf

  22. Business Inventories and Sales • Published by: Bureau of the Census • Frequency: monthly • Period Covered: two prior months • Market significance: low • Inventories affect the pace of future industrial activity. But report comes in late.

  23. Factory Orders and Manufacturing Inventories • Published by: Bureau of the Census • Frequency: monthly • Period Covered: two prior months • Market significance: low • Overlapping information with the Advanced Report on Durable Goods

  24. Productivity and Costs • Published by: BEA • Frequency: quarterly • Period Covered: prior quarter • Market significance: moderate • Useful information about inflation, however, it is subject to substantial revisions.

  25. Government Spending

  26. Federal Budget • Published by: Treasury Department • Frequency: monthly • Period Covered: prior month • Market significance: low

  27. Foreign Sector

  28. Merchandise Trade Balance • Published by: Bureau of the Census • Frequency: monthly • Period Covered: two prior months • Market significance: moderate • http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

  29. Current Account Balance • Published by: BEA • Frequency: Quarterly • Period Covered: Previous quarter • Market significance: moderate

  30. Foreign Industrial Productions • Japan Industrial Production • Published by: Ministry of Economy, Trade and Industry, Japan • Frequency: Monthly • Period covered: Previous month • China Industrial Production • Published by: National Bureau of Statistics of China • Frequency: Monthly • Period covered: Previous month • German Industrial Production • Published by: Federal Statistics Office, Germany • Frequency: Monthly • Period covered: Previous month

  31. Global Manufacturing Purchasing Managers Index • Published by: JP Morgan • Frequency: monthly • Period Covered: prior month • Market significance: moderate • http://www.ism.ws/ISMReport/content.cfm?ItemNumber=17719

  32. OECD Composite Leading Indicators • Published by: OECD • Frequency: monthly • Period Covered: prior month • Market significance: moderate

  33. Labor Market

  34. Employment (payroll employment and unemployment rate) • Published by: Bureau of Labor Statistics (BLS) • Frequency: Monthly • Period Covered: prior month • Market significance: very high • First complete look at economic activity. • http://stats.bls.gov/news.release/pdf/empsit.pdf

  35. Employment Cost Index • Published by: BLS • Frequency: quarterly • Period Covered: prior quarter • Market significance: moderate • Comprehensive measure of labor cost. But published only quarterly.

  36. Unemployment Insurance Claims • Published by: U.S. Department of Labor • Frequency: weekly • Period Covered: prior week • Market significance: moderate • Accurate in gauging labor market conditions.

  37. Inflation

  38. Producer Price Index • Published by: BLS • Frequency: monthly • Period Covered: prior month • Market significance: high • Good measure of inflation.

  39. Consumer Price Index • Published by: BLS • Frequency: monthly • Period Covered: prior month • Market significance: high • Key measure of inflation • http://stats.bls.gov/news.release/pdf/cpi.pdf

  40. Specialized Indicators

  41. Cyclical Indicators • Published by: BEA/The Conference Board • Frequency: monthly • Period Covered: prior month • Market significance: moderate

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